An Economic Analysis of Collection and Transport of Municipal Wastes in Japan

Abstract

This paper analyzes the cost structure for municipal waste collection in Japan. Since municipalities in Japan are responsible for dealing with garbage generated by households, data regarding municipal waste is more readily available than data regarding waste from firms. Nevertheless, few studies have been published which analyze the end-of-life product logistics of municipal waste. Here this research aims to reveal some structural features of such end-of-life product logistics by using the SUR model.

The main results are as follows. First, it is shown that the degree of scale economy between the end-of-life product logistics and other processes of waste treatment is quite different. Especially, some local governments are large enough to eliminate the scale economy of the logistics process while all local governments possess scale-economy regarding the other processes.

Secondly, the analysis shows that monopoly is not the best approach for the Japanese case even though similar research in other countries supports monopoly as the best approach. Based on more than 1,700 samples, this paper statistically shows that, in Japan, subcontracting reduces the cost, but using only one contractor makes things worse. This means that there are inefficiencies that are larger than the advantage proffered by economy of scale.